Rachel Reeves, the Chancellor of the Exchequer, faced a challenging reception at the Confederation of British Industry (CBI) conference as she defended her recent £40bn tax increase whilst promising no further business tax rises. Speaking at London’s QEII centre, Reeves encountered sparse applause as she maintained her stance on the fiscal decisions made in last month’s Budget.
The Chancellor’s defence came amidst growing concerns from corporate leaders, with some indicating they were reconsidering their UK investment plans. The Budget’s £25bn increase in employers’ national insurance contributions, coupled with minimum wage increases and worker rights reforms, has sparked significant debate within the business community.
Pladis CEO Salman Amin, whose company owns McVitie’s, expressed concerns about future investments, highlighting their previous £2bn commitment to Britain. Scottish Power’s chief executive Keith Anderson echoed these sentiments, suggesting the Budget measures could create additional challenges for businesses.
The CBI’s own survey revealed troubling indicators, with nearly half of their members planning to reduce headcount and two-thirds considering scaling back recruitment. CBI director-general Rain Newton-Smith, while acknowledging the need for fiscal stability, warned about the impact on competitiveness and growth.
Conservative party leader Kemi Badenoch criticised the Budget as an “unprecedented raid” on British business, though stopped short of promising to reverse the measures. The response from business leaders at a private breakfast with Bank of England governor Andrew Bailey and Downing Street business adviser Varun Chandra was notably more measured, with some suggesting the chancellor deserves time to prove her strategy.
Despite the criticism, Reeves remained firm on her position, emphasising that public services must now operate within their means, as she ruled out additional borrowing or tax increases. The chancellor’s stance marks a crucial moment in Labour’s relationship with the business community, as they attempt to balance fiscal responsibility with maintaining British business confidence.
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